A bitter battle
As bidders in the government's search for a strategic investor in Polmos Białystok (PB) - which claims 21 percent of the Polish vodka market and owns two of Poland's most famous brands - have been systematically pared from 20 down to three, the lobbying for government favor has become ever more intense.
Now, two of those three remaining companies - Central European Distribution Corporation (CEDC) and Polmos Lublin (PL) - are embroiled in a war of words that has led all the way to the Office of Competition and Consumer Protection (UOKiK).
Two months ago CEDC began refusing to buy PL products. "From the moment of the submission of the binding offer for the purchase of Polmos Białystok shares, the distributor stopped receiving Polmos Lublin products and significantly hampered their further distribution through several trade channels in Poland," PL said in a statement after filing a complaint with UOKiK accusing the distributor of dishonest business practices. PL didn't name CEDC specifically in the statement, but there was little doubt as to which company the producer was referring to.
CEDC has come back swinging, calling PL's statement "misleading," and saying that as of February, it had a huge overstock of PL product, due to an extra-volume deal that month (at PL's request) that gave CEDC 401,000 extra liters of PL alcohol.
"For us the inventory level at the end of February had risen to over 626,000 liters [of PL alcohol]. With an optimum inventory at around 100,000 liters, we had an overstock of over 500,000 liters," which is enough to last the company two months, says William Carey, president of CEDC. He added that PL's move one year ago to increase the price of its most popular brand, Żolądkowa Gorzka, stunted sales, leading to a 14 percent decline in PL's market share.
"We believe the management of PL must address these concerns of price positioning and marketing efforts behind the brand just like any brand owner. They can't expect distributors to carry unrealistic stock levels," he said.
Now, two of those three remaining companies - Central European Distribution Corporation (CEDC) and Polmos Lublin (PL) - are embroiled in a war of words that has led all the way to the Office of Competition and Consumer Protection (UOKiK).
Two months ago CEDC began refusing to buy PL products. "From the moment of the submission of the binding offer for the purchase of Polmos Białystok shares, the distributor stopped receiving Polmos Lublin products and significantly hampered their further distribution through several trade channels in Poland," PL said in a statement after filing a complaint with UOKiK accusing the distributor of dishonest business practices. PL didn't name CEDC specifically in the statement, but there was little doubt as to which company the producer was referring to.
CEDC has come back swinging, calling PL's statement "misleading," and saying that as of February, it had a huge overstock of PL product, due to an extra-volume deal that month (at PL's request) that gave CEDC 401,000 extra liters of PL alcohol.
"For us the inventory level at the end of February had risen to over 626,000 liters [of PL alcohol]. With an optimum inventory at around 100,000 liters, we had an overstock of over 500,000 liters," which is enough to last the company two months, says William Carey, president of CEDC. He added that PL's move one year ago to increase the price of its most popular brand, Żolądkowa Gorzka, stunted sales, leading to a 14 percent decline in PL's market share.
"We believe the management of PL must address these concerns of price positioning and marketing efforts behind the brand just like any brand owner. They can't expect distributors to carry unrealistic stock levels," he said.
